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A Systematic Literature Review of Risk Management in the Islamic Banking System: Research Agenda and Future Directions

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  • Md Alamgir Hossain

    (IIUM Institute of Islamic Banking and Finance, International Islamic University Malaysia, Kuala Lumpur, Malaysia)

  • Romzie Rosman

    (IIUM Institute of Islamic Banking and Finance, International Islamic University Malaysia, Kuala Lumpur, Malaysia)

  • Nasrin Jahan

    (independent Researcher, Dhaka, Bangladesh)

  • Shahana Afroz

    (Kulliyyah Of Economics & Management Sciences, International Islamic University Malaysia, Kuala Lumpur, Malaysia)

  • Kaniz Afroza

    (Kulliyyah Of Economics & Management Sciences, International Islamic University Malaysia, Kuala Lumpur, Malaysia)

Abstract

In the evolving landscape of global finance, effective risk management within the Islamic banking system has garnered significant attention. This paper presents a systematic literature review that explores the research agenda and future directions in risk management practices specific to Islamic banking. Utilizing the PRISMA framework, a total of 43 relevant articles published between 2004 and 2024 were meticulously selected from the Scopus database and analyzed. The review highlights a diverse range of methodologies, with 34 articles employing quantitative approaches, 7 utilizing qualitative methods, and 2 incorporating mixed methods. The findings indicate a strong predominance of quantitative research, suggesting a critical need for further exploration of qualitative and mixed-method studies to achieve a more comprehensive understanding of risk management in Islamic banking. Additionally, the analysis identifies a significant gap in the literature regarding innovative risk management strategies that align with the unique principles of Islamic finance. This review serves as a vital resource for researchers, practitioners, and policymakers aiming to enhance their understanding of risk management within the Islamic banking sector. By synthesizing existing literature and pinpointing areas for future research, this paper contributes to the ongoing discourse on effective risk management in Islamic finance.

Suggested Citation

  • Md Alamgir Hossain & Romzie Rosman & Nasrin Jahan & Shahana Afroz & Kaniz Afroza, 2025. "A Systematic Literature Review of Risk Management in the Islamic Banking System: Research Agenda and Future Directions," International Journal of Research and Innovation in Social Science, International Journal of Research and Innovation in Social Science (IJRISS), vol. 9(3), pages 1193-1209, March.
    • Handle: RePEc:bcp:journl:v:9:y:2025:issue-3:p:1193-1209
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    References listed on IDEAS

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    1. Shailesh Rastogi & Arpita Sharma & Geetanjali Pinto & Venkata Mrudula Bhimavarapu, 2022. "A literature review of risk, regulation, and profitability of banks using a scientometric study," Future Business Journal, Springer, vol. 8(1), pages 1-17, December.
    2. Hassan, M. Kabir & Alshater, Muneer M. & Hasan, Rashedul & Bhuiyan, Abul Bashar, 2021. "Islamic microfinance: A bibliometric review," Global Finance Journal, Elsevier, vol. 49(C).
    3. Salma Rhanoui & Khalid Belkhoutout, 2019. "Risks Faced by Islamic Banks: A Study on the Compliance Between Theory and Practice," International Journal of Financial Research, International Journal of Financial Research, Sciedu Press, vol. 10(2), pages 137-146, April.
    4. Syed Alamdar Ali Shah & Raditya Sukmana & Bayu Arie Fianto, 2021. "Efficiencies in Islamic banking: a bibliometric and theoretical review," International Journal of Productivity and Quality Management, Inderscience Enterprises Ltd, vol. 32(4), pages 458-501.
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